APP deal to boost L.A. mogul
Billionaire drug developer Patrick Soon-Shiong of West Los Angeles should be moving up the list of the nation’s richest people with a deal Sunday to sell a pharmaceutical company for $3.7 billion in cash.
Soon-Shiong and other directors agreed Sunday night to sell APP Pharmaceuticals Inc. to German healthcare group Fresenius for $23 a share, a 29% premium over APP’s closing price Thursday of $17.82 a share, APP said in a statement.
Although he stepped down as chief executive of APP three months ago, Soon-Shiong owns 83% of the Schaumburg, Ill., company. He also owns a similar stake in Abraxis BioScience Inc. in Los Angeles, which is worth $2.5 billion based on Thursday’s closing price of $62.52 a share.
Soon-Shiong said Sunday that combining APP with a Fresenius unit would “allow for the rapid globalization of APP’s portfolio.”
A former UCLA surgeon whose name is on more than 50 patents, Soon-Shiong ranked 117th on Forbes magazine’s list of the richest Americans last year. Forbes estimated his net worth at $3 billion.
The APP deal would give him a gain of as much as $3.8 billion if goals are met. Under the terms of the deal, Fresenius would pay APP shareholders an additional $6 a share -- for a total 63% premium -- in 2011 if the company meets undisclosed financial targets.
The German company also agreed to assume APP’s $940 million in debt.
APP, which makes injectable drugs for hospital use, was split off from Abraxis last fall. The L.A. company makes Abraxane, the first cancer-fighting drug developed through the use of nanotechnology, to combat breast cancer.
Fresenius, which had $18 billion in revenue last year, plans to fold APP into its Fresenius Kabi division, according to the announcement. APP last year earned $34.4 million on revenue of $647.4 million.
“With the APP platform, Fresenius Kabi will be able to market its product range in the U.S.,” Fresenius Chairman Ulf Mark Schneider said. “Fresenius Kabi’s international marketing and sales network will allow us to sell APP’s products globally.”
APP, with 1,400 employees, would remain headquartered in Schaumburg, a company spokesman said.
Fresenius Kabi has 17,800 employees.